Bruce Taylor recently spoke with Dr. Phillip Laplante and Thomas Costello, co-authors of "CIO Wisdom II: More Best Practices". The discussion touches on best practices and lessons learned from CIOs. Following is an edited transcript of that conversation. You may also listen to the original interview here.
Hi. I'm Bruce Taylor, and this is Voices on ITworld. Today we're talking about IT leadership, in a time when it's becoming evermore challenging. To be a successful CIO, an IT executive in today's world, requires one part vision and philosophy, one part business strategy, one part technical prowess, and one part human, social, and behavioral awareness. And in my personal view, no one part out weighs the importance of each of the others. My guests today have that balance clearly in mind in their most recent book, entitled CIO Wisdom II: More Best Practices. It is a detailed, rigorous, realistic work based on proven in the trenches solutions from world-class CIOs. The authors are, first, Dr. Phillip Laplante who directs the CIO Institute, a knowledge community of practice for CIOs, based in Philadelphia, and a sought after executive mentor and coach. Welcome to the program, Phil.
Phillip Laplante: Thank you for having me, Bruce.
Bruce Taylor: Also joining us is Tom Costello, CEO of Upstreme, and I spell in case you're running right to Google right now, Upstreme is U-p-s-t-r-e-m-e. A firm dedicated to assisting senior management, boards, and investors in matters relating to the deploying and evaluating of new technology. Gentlemen, before we get started, I'd like to give you each a chance to talk just a bit about your respective work and what you see opening up for your work in 2006. Phillip, why don't you take the first crack at this.
Laplante: Well, thank you very much. First I think that I will be spending a significant amount of time evangelizing the work that we've done in the CIO Wisdom II book. There's a lot of message here from the various contributors, there's a story, there's some themes. And I do want to spend some time promoting this, both to the CIO community in the outside world, to my own students at Penn State University and I ought to put a plug there for that. And we really need to get on the road and evangelize this work. I also have some other work that I've been doing, very closely related to this, that has to do with anti-patterns and dysfunction in IT organizations and I'll be continuing to work on that. And finally, I'm really opening up my own research, applied research in open source software, how to measure its goodness, how to apply it in various settings, how to test and document it. So I hope to be working on those three areas with a lot of enthusiasm this year.
Taylor: So let me ask you one follow-on question before we go to Tom. Give me, give our listeners, one to three predictions for 2006, in the IT universe.
Laplante: Okay, first prediction, I think that the use of offshore providers is going to be increasingly challenged, as a viable business strategy. It's going to be called into question much more frequently. It's no longer going to be a reach-for-without-thinking kind of solution. The second thing I think we'll be seeing in 2006 relates to the open source movement. I think CIOs are going to be looking even more aggressively at using open source solutions, particularly in places where they haven't been looking at them before. I want to say, in places where open source has been considered verboten in mission critical systems, in secure systems. I think it's too viable of a solution space to be ignored. And I guess the third prediction I have will be in hiring. I think that it's clear that the ebb of hiring in the United States, of IT, of indigenous IT workers has been reached, I think CIOs are already beginning to staff up. I think the employment outlook is going to be looking much better for the IT workforce in this country and I think that bodes well for a lot of folks in the academic community, in the research communities and in the industrial sectors.
Taylor: And let me ask, just my final question onto your last point. Do we have an IT workforce that's ready for the new world?
Laplante: The IT workforce always needs to be re-tooled. Has to be continuously retrained. I think that some of the models for training and education that worked five years ago don't work anymore and I think, putting on my academic hat, this bodes well for students returning for graduate studies, advance professional studies and for the re-training of those that are not in the IT space, to shift gears and become -- enter the IT workforce, because there will be opportunities there.
Taylor: Tom, it's your turn.
Tom Costello: Yes sir, thank you. And thanks again for having both Phil and I on this. To your earlier question regarding where we're heading for the coming year. As you would guess, Phil and I have some symmetry in our lives. Open source is predominantly the push for us coming into the next year and probably the subsequent several years. I believe that's going to continue to expand and we're seeing a fair amount of activity and are going to continue to address that. Enterprise architectures and SOAs are a significant issue. Many organizations, I think, have started those efforts and realize that they may not have as much clarity in the business process as they would like. And may, to some extent, be explaining the difficulty in IT project deliverables over the last couple of years as well. We're starting to discover and uncover more about those. And I think, as Phil said, looking into the predictions for the coming years, I consider open source sort of the object in the mirror that's closer than it appears and it's now moving into the passing lane. I think, clearly, it's not a new concept as a business model, as a methodology, tools, or otherwise. But I think a lot of them are getting ready for the prime time and the rest of the world has been aware of it for some time and the U.S. has not, and I think that's going to become a significant element. And I think a second prediction is that the next big thing is going to still be the old broken thing. There are a fair number of things in IT that have not been addressed in the last couple years as we've seen IT pushed under CFOs and the belt tightening. I think the understanding of the strategic advantage of IT is becoming more evident. And a lot of the things that have been put off are now coming to the forefront. And lastly, Phil's prediction with the workforce is exactly correct. When you look at the size of the IT workforce in the federal government that's on the verge of retiring. And the baby boomers that are moving up and out. There is, I believe, a significant shortage coming in the future and I think there are significant challenges that we have, not just the usual changing of tools, but I think that the succession planning and the preparation of the people that need to come next is woefully inadequate and I think we're going to have some challenges coming forward.
Taylor: Before we go to the book, and this may play to it a little bit. One of the things that occurs to me, over and over again, that I hear over and over again as I travel and speak and conference and whatever else it is that I do, is there is a discontinuity, a disconnect between strategic business objectives, between the thinking of CEOs and how that ultimately gets translated into practice at the level of the CIO in IT. What's your personal, each of you, your personal views on this, on the alignment of business strategy with technology?
Laplante: It turns out that that is exactly one of the major themes of this book that emerged from the collective musings of the CIO contributors, and it's consistent with my own belief, that for a long time there hasn't been consistent alignment between business strategy, business objectives, and the IT strategy and objectives, as it were. And this is increasingly being recognized as a fundamental problem for many of the criticisms that IT has received. In terms of project overruns, or failure to deliver value. For being an interfering force rather than an enabling force in the business. Savvy CEOs and CIOs know that the business strategy and the IT strategy are one in the same, they're not different. The IT strategy really is an underpinning to support the business strategy. I think finally the word is getting out that it's no longer the exceptional CIO that understands this, it's a job requirement that the CIO understands it. I think this bodes very well for business, if this becomes a pervasive mindset. But it's my personal opinion that you're right on track there, Bruce. It was resonated in the themes that our contributors lent us in the book and I absolutely agree with it.
Costello: As Phil and I had started to collect the papers, and we were going through them and the process by which we did that we can probably get into a little more detail. But effectively, it was a collaborative process but we didn't give people topics or round them up. Or even try to pre-determine any of the details of each of the chapters. But what we got back was what we continue to refer to as this unexpected symmetry. And the question that you're raising is exactly one of the points that continues to surface over and over again, that the ability of IT, for instance, to manage the portfolio of projects that are in front of them, based on the direction of the company, whether it's articulated just through a vision mission statement, or balance score card or any other mechanism. It's a real challenge, because those connections really don't seem to be fitting as nicely as they should. It's very difficult to point at a project and articulate the elements of that project that are in support of any of these overarching goals of the company. And it's also clear that many of the executives -- IT is as close as they'll ever come to being in the construction business and for many of them that's just not a core discipline, and so it's very difficult for them to understand how to make those connections. One of the things that comes out in the book, as Phil said, in many of the chapters are this drive to make that thing work better. And what we found is that the feedback from the book, post publishing, is that many people are recommending that other executives, non-technology executives, read this because it's at such a state that if you are not technically inclined, you will still find an awful lot of value in here and how to start making those connections work a little bit better.
Taylor: That seems to me to be one of the things that has begun to take hold, is that people at the MBA level of upper management, middle and upper management, are today much more technology savvy than particularly a kind of a program and project level, than ever before. Does that present unique problems to the enterprise CIO? That these people don't report to them?
Costello: I think there are two things, I agree that they are more savvy, to the extent that they are coached through the programs and I think that as they now enter the workforce, they're challenged to do those at an earlier stage than perhaps before. I don't know, however, that I would argue that they have necessarily been immersed to the extent that they fully understand it. So I think that many of the people that -- the engagements that I'm brought into -- I agree with you, I'm finding people who really do understand at the macro level how all of this fits together. But it seems that there is still a disconnect. They understand the mechanics, but there are a lot of things that are missing from that process. And it goes to exactly where you started with the prior question. There's no connection. It's very easy to go in and say we're going to do a really great job on this project, but if it was the wrong project to begin with, if there's no connection, then even they start to have questions. I think the technology teams are doing better at speaking to the business. I think the business is better at understanding why they're doing things. But I don't know that we've necessarily turned the corner on making those things glue together properly.
Laplante: I agree with Tom completely. But it sort of occurred to me, as you were both speaking, that while it's probably true that the non-technical executive is becoming more IT savvy, there's a downside to that. Because as they become more IT savvy there's the danger that they believe they know more than they really do and when you don't know what you don't know, that can be a dangerous thing. At the same time, it could be argued that the non-technical C-level managers are becoming more IT savvy than the CIOs are business savvy. And so you can imagine these two trains, driving in the same direction, towards this center point where there's this overlap of business savvy and IT savvy. The CEOs are heading towards the -- in a westbound direction -- heading towards the IT savvy. And the CIOs are heading in the eastbound direction towards increased business savvy. And when they meet at the middle, that's when we'll have this convergence of business strategy and IT strategy that is so desirable.
Taylor: Let's dive right into the book. Gentlemen, tell me how you chose the method with which you constructed this book. I must say, I've had it as bedside reading for about two weeks, and I found it fascinating in how you constructed it and how easily it takes me through some pretty profound processes. So, what got you to this idea?
Laplante: Well, thank you for the compliments on the book. I had done several books before this, including, and most importantly, two dictionaries that I had edited over the years, which had involved hundreds of contributors and engineering type contributors and many of them academic. So I knew the challenges of herding lots of cats. And I knew that the predecessor to this book, the CIO Wisdom I, the initial version, had used a different model. They had monthly meetings with the contributors and they'd sit around the table and they'd flesh out the chapters and I can't imagine the stress that must have created. But I knew from previous experience that the best way to do this, at least I thought, was to entrust the contributors to sort of self-organize. I knew I couldn't do it alone. And my first thoughts were to reach out to Tom, who had so much to offer, in many ways complements my skill set and background very, very well. And I knew I would need his help. And when we agreed to do this, we agreed that the best way would be really to lay out a very, very thin framework. We told the potential contributors what the purpose of the book was going to be. We didn't tell them what they'd have to write about, we simply asked them to choose a topic that they felt very comfortable with and knowledgeable about, to propose that to us and once we had maybe tuned it a bit, or steered them a bit, we let them at it. We provided encouragement and different contributors needed different levels of support. In a couple of cases we met regularly with the contributor and reviewed drafts. In other cases, the CIOs went off and a few months later presented us with their near final chapters and along the way we would recruit others where we thought we might have a bit of a gap in coverage. But it was really amazing to us that when it was all said and done, that we were able to impart a structure on all of these nearly randomly produced chapters. We were able to present a structure on top of it that we thought made a lot of sense and we began to see these unifying themes, like the one we mentioned before this business and IT strategy convergence. So sometimes you kind of close your eyes and cross your fingers and hope it's going to work. It was a bit of a leap of faith there, I think. But we had quite a bit of faith in our colleagues and friends who were contributing and we're just delighted with the way that it came out.
Taylor: One of the things that occurred to me, and I'm really glad we started this conversation, from the framework of what you see coming. And particularly around the notions of open source and the notions of the workforce and strategic alignment. One of the things that either I missed in the book, or it's there and I needed to tease it out by being a little bit more thoughtful, but I'd like your thoughts on it, is that at the layer of wisdom, at the elevated layer of wisdom, one of the things that I was trying to get out of this book is, what if I'm a CIO in a rather slow moving industry sector. And I've seen an example of this recently in old line manufacturing in Canada. And where innovation is the key enemy. Meaning, they can't get at it, they can't move fast enough to become an innovative enterprise. And it struck me, as I was looking at this, that there were a number of things that have come on the horizon -- open source certainly being one. Voice over IP and wireless and devices, embedded devices, things like that being another. There are a host of new applications domains that have arisen over the last several years that it strikes me that CIOs are struggling to escape bunker mentality. And move into these new areas. How does this book help people deal with the new, the new reality?
Costello: I love the question. I think this goes to the point about the next big thing being the old broken thing. I think there are a fair number of organizations, especially those that are probably in the lower technology spending or have, for any other reason, been forced to re-trench and just hang on, who also understand that there are competitive advantages that they're going to have to address at some point. And they know that there's going to be a transition that they're going to have to tackle as well. I think what the book does in many of these cases is it can, for a non-technical executive, give them a primer, of a framework for thinking about the problem in a broad sense and then understanding what the level of emersion will be in the detail. I think for a technology oriented CIO, reading things for instance, RFID, if you were in an organization that's not yet employing it, that particular chapter would be a great overview whether you are the CIO or not. And at the same time it's also going to give you a sense of what that technology really entails, whether it's a big implementation or small, the variety of things that you can choose to do.
Laplante: Yeah, it's interesting. I have two thoughts on that, well three if I echo Tom's sentiment that the next best thing is fixing the old broken thing. For those old-line type industries where innovation is, as you say, verboten, there's some chapters there that really speak to process refinement, process improvement. I'm talking specifically about Peter Kraynak chapter on business process tuning and also the IT governance chapter by Dave Pultorak , which it sounds like it's a governance issue, and it is, but it gets into the IT infrastructure library, the ITIL framework for IT process improvement. And typically those old line manufacturing type businesses are very much into the quality initiatives, the six sigma kinds of process improvement, the ISO 9000. So those two chapters kind of embrace that fine-tuning. So that's one thought. The other thought is I'm not sure that it's always true that the old-line businesses are always adverse to change. And I think a particular -- one of our contributors is Autumn Bayles , who's the CIO for Tasty Baking Company, which out on the East coast here is a well-known, old-time specialty baker, kind of like Drakes or Hostess. In any case, those folks are still using some of the same oven equipment that's 70 or 80 years old because they're afraid to change the equipment for fear of changing the taste of the product. So in that regard they're very conservative. Yet, her IT shop is very avant-garde, I mean she's very innovative. She's introducing all kinds of initiatives and being encouraged to do so, as long as she doesn't touch the baking molds. So I think a lot of it, even in the old line industry, depends on the encouragement of the CEO, if they're willing to allow the CIO to have some leeway. And a lot of that comes from the CEO having trust in that CIO and a lot of that trust comes from the CIO doing the kinds of things that the contributors talk about in this book.
Taylor: To go back to that first question that I asked, one of the things that I observed in this project I was working on around innovation and manufacturing, was that if the CEO did not have a brand vision for his enterprise, that saw the business clearly being in a global market and saw that the business no longer was wood pulp refinement into fibre products, but instead was a global supply chain. One fellow said it to me, he said it's no longer competition globally plant floor to plant floor, it is global supply chain to global supply chain. And it struck me that inside that was a great point, and that is that CIOs have not been very effective. I'm making a statement, and challenge it, please. Have not been very effective at elevating the strategic nature of IT, to the attention of the CEO. If the CEO doesn't have that view, CIOs have been very hard-pressed to elevate the discussion, would you agree with that?
Costello: I do a fair amount of work in mergers and acquisitions and I tend to do not just the technology due diligence, but the broader operational and business due diligence as well. And so I agree with your statement and I would point out that if you were to go to an executive who, for any reason, was looking at a competitor, when they start to do that valuation of that company, and I mean monetary valuation, they rarely ever look at technology. They see it as a cost center. They'll look at all the financials. They'll look at top line revenue, they'll look at sales channels, they'll look at all these components. But rarely do you see, in that space, someone dipping in and saying now how are they leveraging technology? Is this a play that we can then use that and expand on it? Are these people creating an infrastructure underneath that gives them enhanced capability going forward? It's not that there isn't value there, it's that they're not looking for it. And so I agree with you completely. I think a lot of the clients that are engaging us are doing so because of that, they know we get in and open it up with a can opener and can give them the explanation of the technology leverage. And I think that mindset is starting to expand more and more. But I think it is grossly undervalued and I think that as a result then, when the CEO turns internally and goes to the CFO, and in many cases I think the statistics now are roughly 62% of all the CIOs are reporting to a CFO. When that CEO turns internally and says, make sure you keep that belt nice and tight, here's your cap on technology spending this year, but oh by the way, make me strategically competitive. That's a tough challenge for any CIO. And as we all know, that change has been shifting more and more under CFOs and I'm curious, I'm not saying that model can't work, I'm curious if we're either going to fix the connection or whether we're going to reverse the trend and try to give technology leadership more of a strategic and competitive advantage.
Laplante: And this gets right back to your original question in that the CIO must show the relationship between the IT activities and the strategic objectives of the business. Not to portray the IT shop as this cost center, as friction on the business. It has to be shown how it's an enabling function and how investment of dollars in the IT function can pay for itself and more. And I don't think CIOs in general have done a good job of that in the long run, partly because it's hard to do, it's not because CIOs are remiss in any way, it's because it's hard to do. It's hard to show the business value of a certain IT -- how do you valuate the cost of upgrading your desktops? And show how that may lead to a reduction in lost business opportunities? It's really hard to do. CEOs are savvy enough to not be easily persuaded and they don't buy the usual talking points, but as CIOs become better at doing that, the alignment will be easier to show and it will be easier to show how dollars spent on the IT operation do have value beyond just sort of paper towels in the restroom.
Taylor: Gentlemen, as we wind down, one of the things that occurred to me as I was reading the book, and jotting notes in the margin, was that this is a book -- if you remember a few years ago, when Jim Collins came out with Good To Great, I think the publisher sold boxes of the books into organizations where managers would walk around and hand the book out to people. And it struck me that if I were a savvy CIO, I would go to Prentice Hall and I would buy boxes of this book and I would take it and deliver it, hand deliver it, to every program manager, every project director, and say would you read this and start talking about it, start thinking like this. So give me your last thought on if you think that's a good idea.
Laplante: Well, I can tell you, having written 21 other books, that generally one doesn't get rich on books. But really because we want the message to be spread and because we think there's really some good to come of this. And actually, we know of a few CIOs, in fact, that are buying 50 or 100 copies of this for that very reason, they want to give them to customers, as well as their own staff persons. We think the book is valuable, not just to CIOs, but to CEOs so they can better understand the CIO mindset. And as well to project managers and folks that work for the CIO. So that they can understand why the CIO makes decisions that they do. Sometimes in the dark of night that frustrate a line project manager, this might help them better appreciate the motivation for it. So yeah, we agree with you.
Costello: Phil and I, at the very early stages of this book, it was very clear that we were really trying to get the message out. We are clearly both in this as a profession but take it very seriously as an art and a craft and a science at the same time and have really been trying to, not pretend that we have all the answers, again, which is why we went down the collaborative model. There are a lot of really smart people out there in our field and a lot of them have really paid their dues the hard way and we want to get their thoughts and learn from that process and then share it. So this book is really sort of that effort and we're very happy and proud and thank you very much for the feedback on it. We'd like to see that happen as well and we are also making ourselves available to anyone who wants to hear the message. If there's something in there that doesn't make sense, we're happy to make connections with those authors to anybody that needs it and we just know that this is important enough that we just want to make sure that it gets rolling. So we're flattered to hear the feedback and certainly happy to do anything we can to get that word going.
Taylor: The book is CIO Wisdom II. And our guests have been authors Phil Laplante and Tom Costello. Gentlemen, thank you very much.
